Duke Realty Leases to Keystone

Duke Realty Corporation (DRE - Analyst Report), one of the largest commercial real estate companies in the U.S., has recently leased 168,000 square feet of space in its Grand Lakes I warehouse facility in Grand Prairie, Texas. The lessee was Keystone Automotive Industries, a recycled and refurbished automotive parts supplier and a subsidiary of automobile recycling giant LKQ Corp. (LKQX).

With the deal, Keystone is expected to consolidate its operations in the region and relocate two of its existing Dallas facilities in to the newly -leased building. The leased property is strategically located in close proximity to the highway network that facilitates easy access and provides unhindered connectivity with the region. Furthermore, the site offers ample dock and drive-in door capabilities to meet the additional space requirements of the lessee.

Duke Realty owns, manages, and develops industrial, healthcare, and office properties across the U.S. While the company performs its rental operations through its subsidiary, Duke Realty Limited, it also offers services such as property and asset management, development, leasing and construction.

For over 35 years, the company has leveraged its local presence and its integrated platform to drive returns, and has established itself as a premier publicly traded real estate developer in the country. Duke Realty is currently repositioning its portfolio and has exited certain markets in an attempt to concentrate in areas where it already has a strong presence.

The company has temporarily closed its operations in some of its newest markets including Austin, San Antonio, Seattle, and Newport Beach. The portfolio repositioning is likely to improve the internal growth metrics, enabling it to capitalize on improving market fundamentals.

We maintain our ‘Neutral’ rating on Duke Realty. The company currently has a Zacks #3 Rank, which translates into a short-term ‘Hold’ recommendation and indicates that the stock is expected to perform in line with the overall U.S. equity market for the next 1–3 months.

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